1 April 2015 - Welcome to Another Multinational Law Firm
If you type into Google “global law firm arrives in Australia” you get 11.3 million results.
Not too long ago a multinational law firm arriving in Australia meant that a large local firm would be changing its letterhead and cranking up its charge out rates. A new multinational law firm meant globalising hundreds of Aussie lawyers while the rest of the market looked on in shock and awe.
The market gasped at the creation of Norton Rose, Herbert Smith Freehills, Allens Linklaters and K&L Gates.
When there were no more big local firms to go around, the globals combined with smaller firms such as with the establishment of Bird & Bird in Australia.
Nowadays the establishment of a global law firm in Australia is heralded with the lateral movement - also known as poaching - of a handful or fewer local lawyers.
And the global law firms are arriving at a rapid rate. If the pattern in March 2015 persists then we are likely to see two new global law firms setting up in Australia every month.
In March we had news of the arrival of Pinsent Masons and now Hogan Lovells.
The secret is well and truly out that Australia is in great need of more multinational law firms.
30 March 2015 - How Big is the Latest Slater & Gordon Acquisition?
S&G is in the final stages of tying up a deal to acquire the Professional Services Division (PSD) of Quindell in the UK. PSD provides legal services and complementary services. How big is this acquisition?
“…a decade ago a real alternative to the big-firm model in professional services was not clear. Today it seems likely that the world's largest professional services providers will operate in a virtual marketplace.”
“If you can hit the Uber app to get a ride when you need it, why wouldn't you do the same to find the right lawyer at the push of a button?”
“...clients often can't find or afford services at big firms and elite talent is hungry for a different way to offer, charge for and deliver their expertise.”
Matt Faustman, co-founder of US-based online platform UpCounsel, comments on client needs, "The top four priorities we are hearing are price, responsiveness, efficient discovery and transparency," he says.
Botsman writes, “the economic rationale for a traditional firm structure is collapsing. And the labour market is where it could create the most destruction.”
27 March 2015 - Lawyers to The Australian Olympic Team
24 March 2015 - Five Year Predictions of Employment Numbers for Solicitors and Secretaries
Economists at the Federal Government Department of Employment have predicted that the number of secretaries employed in Australia will decline by 22.3% over the five years from November 2014 to November 2019.
Projected employment for solicitors is an increase over five years of 21.1%.
Over the past two years the economy has grown by about 2.5% per annum. A 21.1% increase over five years equates to an annual growth rate of around 4%.
According to the prediction, there will be 22.3% fewer secretaries employed in November 2019 than there were in November 2014. The prediction covers all secretaries and not just legal secretaries. Why the pessimistic prediction? Perhaps it is a case of less expensive technology replacing more expensive labour. The background analysis is not provided with the statistics.
Surprisingly, the growth predicted for “All Occupations” is only 10%.
High growth fields of employment are predicted to be in Health and Personal Services. For example, the employment of Anaesthetists is projected to increase 30.6% over five years.
The predicted decline in the employment of Secretaries puts this category fourth from the bottom, with the bottom of the table at negative 24.7%.
18 March 2015 - Ex-Melbourne Arm of ILH Emerges as R.B. Flinders
In July 2012, ILH Group began acquiring equity in Melbourne-based commercial law firm Rockwell Bates. Over time it acquired 49% of the equity. In July 2012 Rockwell Bates was generating $4 million in revenue.
The Managing Principal of the firm, Adam Levine, has freed his firm from the ILH Group (now in Administration) and is re-launching the firm as R.B. Flinders. Under ILH the firm had been trading with the Rockwell Olivier brand.
According to AFR reporting "It's understood Levine has agreed to terms with KordaMentha [the Administrator], will take full control of the firm..."
Adam Levine - Executive Chairman
George Spiliotis - Managing Principal
John Gdanski - Principal
Troy Palmer - Principal
R.B. Flinders is broadening its service offering compared to the original Rockwell Bates commercial law firm. It is offering a lot more private client and personal law services including: 24/7 Legal Helpline, Legal Expense Insurance Solutions, Conveyancing, Family Law and Disputed Wills and Estates.
17 March 2015 - Insurance Litigation Firm Growing With The Aid of Fixed Fees
16 March 2015 - No Retreat for Victoria Conveyancing Activity
The RBA's healthy attitude to interest rates has contributed to an unabated climb in Victoria's property sales activity.
Year on year home values in Melbourne are up 7.37% to February 2015. For the three months to February 2015 home values are up 4.5% (Source: RP Data Index). The rate of growth in home values is slowing down but as long as it is positive, then the greatest probability is that property sales volumes will continue to climb.
February 2015 property transfers are up 3.5% compared to 12 months ago; up 27% compared to two years ago and up 15% compared to three years ago.
10 March 2015 - Now We Know What Happens When a Publicly Listed Law Firm Goes Under
7 March 2015 - Maddocks Loses Heavyweights For Australian Launch of Pinsents Masons
Click above image to read details
(image: website screenshot)
5 March 2015 - NSW Conveyancing Activity Up Again
In February 2015, NSW property transfers were up 12% compared to February 2014. This is a turnaround because December 2014 and January 2015 combined were down by 5% compared to 12 months ago.
February 2015 property transfers were up by 12% compared to 12 months ago but compared to 24 months ago (February 2013) it is up by 38%.
The December and January figures started to point to a tempering trend in property sales after a buoyant calendar 2014. If there was a most likely factor for the latest surge in activity, it is probably the change in interest rate sentiment, actualised with a rate cut one month ago.
Property prices and share prices have benefited from the change in sentiment on interest rates. As usual, when property prices are on the up so is conveyancing activity.
3 March 2015 - LegalVision Secures $1.2m Angel Round
Since 1 July 2014, Shine Lawyers (Shine) has made a number of acquisitions: Stephen Brown Personal Injury Lawyers (WA), Emanate Legal (Qld), Sciaccas Lawyers Pty Ltd and Sciaccas Family Lawyers Pty Ltd (Qld).
Shine has reported revenue of $73.1m for the six months to December 2014. The (normalised) EBITDA on this revenue was $22m or 30% of revenue.
The 2015 half year revenue was $16.5m higher than the 2014 equivalent period.
Acquired practices contributed $14.3m of this $16.5m increase. Therefore, Shine’s revenue growth excluding these acquisitions was 3.8%.
Last financial year (2013/14), Shine reported annual revenue of $115.5m and EBITDA of $34.2m (29.6%).
How is Shine performing? An EBITDA margin of 30% is around 6% better than Slater & Gordon’s 2015 first half result. The main factor in the difference is staff costs. Shine has managed to keep these to around 46% of operating revenue.
The Emanate and Stephen Browne acquisitions have increased Shine's revenue for the half year and even more significantly, boosted profitability.
27 February 2015 - Solicitor Employment Market Not Revealing its Intentions
After one year of mild recovery in the demand for employed solicitors, the graphs have chosen not to reveal their current intentions. The downward jolt depicted for January 2015 is a normal movement for that time of the year.
The Australian economy is similarly not showing a clear direction. The Reserve Bank was worried enough to reduce the official interest rate recently. This move implies that the glass is looking more half empty than half full.
The Federal Government has so far failed to make any meaningful improvements to its own fiscal position. On the other hand, if it had not failed, the economy would be feeling a lot worse than it is at the moment. The recent spike in share prices brought about by an interest rate manipulation, as opposed to a robust economy, is a false sign of hope.
It is interesting to note that the demand for employed solicitors follows closely the pattern of demand for all occupations thus also being under the influence of the state of the economy.
The demand for employed solicitors may be a glass that is half empty or half full. No doubt we will find out soon.
The number of job advertisements on the internet
26 Febraury 2015 - Sargeants Port Phillip and Jim's Property Conveyancing complete first Victorian transfer through PEXA
25 February 2015 - iBarristers
19 February 2015 - Bold Predictions for the Business of Conveyancing from PEXA CEO
"It will compress the time of settlements, possibly down to five or seven days from the traditional 60 to 90-day period. We think this is going to make transactions $150 to $200 cheaper," Mr Price said.
The average conveyancing fee on a home transaction is about $800.
The exchange's $100 million development costs were underwritten by four state governments (NSW, Victoria, Queensland and Western Australia), ANZ, NAB, CBA, Westpac, Macquarie (owner of 24 per cent), Link Market Services and former transport executive and property developer Paul Little.
PEXA's shareholders were not necessarily the "long-term natural owners of the business" and it was likely to list on the stock exchange, Mr Price said.
He forecast an initial public offering by the "middle of next year [or the] second half of next year".
13 February 2015 - Mediators Have Assisted Almost 11,000 Workers to Come to an Agreement with their Employer
12 February 2015 - Slater & Gordon Has Been Bulking up its General Practice in Australia
Slater & Gordon (S&G) has built a general practice in Australia with annual revenue projected to be $60 million this financial year. This figure excludes personal injuries work. It covers what S&G calls general law: family law, conveyancing and business and specialised litigation services.
After significant acquisitions in Australia and the UK, S&G has become a $500 million annual revenue company.
For the half year to December 2014, annual revenue increased by 37.6%, largely as a result of acquisition activity. Importantly, profitability has been maintained with an EBITDA of 23.9%.
The company has stated that the “Australian Personal Injury Law practice remains resilient despite continued challenges in Queensland.”
S&G now employs 1,300 people in 82 locations across Australia and 1,300 people across 14 locations in the United Kingdom.
11 February 2015 - Slater & Gordon Half Year 2014/15 Financial Results
10 February 2015 - USA Expansion Proves Profitable for Bentham IMF Litigation Funder
image from half yearly accounts report
In the six months to 31 December 2014, Bentham IMF made more profit from US cases than Australian cases. Its revenue from Australian cases was also strong producing a financially rewarding half year result. The cash reserves of the company leapt to $134 million.
A total of 10 cases concluded during the half-year (2 in the corresponding period), generating total income from litigation contracts of $77,638,164, a 131% increase over the corresponding period last year (of $33,557,582).
Consolidated net profit from continuing operations after tax for the half-year was $23,010,207 (2013: $9,127,350), representing a 152% increase over the corresponding period last year.
The Group's cash position was $134,395,597 as at 31 December 2014 (30 June 2014: $105,576,733) whilst its investments in cases was $79,135,370 at 31 December 2014 (30 June 2014: $98,636,050).
The Company raised capital during the period totalling $2,374,976 as a result of its dividend reinvestment plan.
In just its third year of operations in the U.S., Bentham reports:
• 10 American deals funded in 2014 – including contract disputes, a patent infringement trial, partnership disputes, and five law firm case portfolios.
• Client recoveries of $100 million from jury verdicts and settlements backed by the firm.
• Gross returns of more than $31 million in the U.S., with net profit of $17 million; clients and outside counsel achieved returns of 69% of case recoveries.
• Four cases resolved in 2014 – including three that commenced this year.
• Nearly 200 total cases reviewed for funding in the U.S., coming from a pipeline of major law firms, corporate law departments, businesses and individual claimants.
6 February 2015 - Knowledge in a Law Firm Packaged into a Subscription Product
3 February 2015 - E-Conveyancing Now Fully Operational in Victoria
3 February 2015 - Keypoint Law Expands into Banking & Finance
Keypoint Law has announced that Allan McDougall has joined the firm. He is the ninth senior lawyer to join the innovative firm since its launch in mid 2014.
Keypoint Law's value proposition: "Our lawyers come from Australia’s largest law firms and senior in-house roles, and have achieved international recognition for their expertise. All of them share a common goal of providing first-class, individualised service to clients free of the constraints of a conventional firm."
Allan McDougall has over 25 years’ experience as a banking and finance lawyer, specialising in asset-based finance, equipment leasing, corporate lending, secured transactions and treasury.
Allan joins Keypoint from one of Sydney’s oldest firms, Pigott Stinson. Prior to that, he was part of the leadership team of Société Générale in Australia, where Allan held the positions of General Counsel, Assistant Company Secretary and roles in their treasury. Earlier in his career, he worked with predecessor law firms to Allens Linklaters and K&L Gates. Allan’s professional credentials include an MBA and being a Fellow of the Securities Institute of Australia.
Allan’s areas of specialisation are:
• Corporate lending, asset-based finance and equipment leasing;
• Personal property securities and revenue law;
• SME loans and borrowings;
• Financial markets and consumer finance;
• Privacy and internet law.
Keypoint Law CEO Warren Kalinko said:
“Allan brings to the firm a wealth of experience in banking and finance law, as well as long-standing relationships with some of Australia’s leading equipment finance companies. His expertise in advising not just large companies, but also smaller firms and private clients aligns well with Keypoint’s client base. We look forward to working with Allan to grow this area of our practice. ”
Allan McDougall stated:
“I am delighted to be joining a law firm with such an innovative and client-friendly business model”.
2 February 2015 - LawPath Launches a Legal Documents Subscription Service for Businesses
Website screenshot of new service
LawPath has already built an online business which it says has served almost six thousand individuals and businesses. Users can search for a document precedent, complete it online, and for an additional fee they can have a lawyer review it.
For example, an online Will is $39. For an additional $260 a user can have “up to 2 hrs of additional legal drafting and legal advice with no hidden or unexpected charges”.
Now, instead of selling one document at a time, LawPath is giving end user business clients “unlimited access to over 200 easy to use documents” including Website T&C's, Contractor Agreements and Shareholders Agreement.
The subscription is planned to be $49 per month. The company is currently running a promotion offering the first 200 users an opportunity to sign up for $19 per month.
Lawyers who partner with LawPath agree to provide fixed fee reviews to users who purchase documents via the website.
LawPath maintains a public directory of lawyers. Prospective clients can post a legal question direct to a lawyer. Lawyers agree to provide the first 30 minutes of their time for free.
LawPath was founded in February 2013. In September 2013 it announced a strategic alliance with LexisNexis.
Last year it closed a new funding round, with the full investment coming from Brook Adcock, the founder of the jewellery business Pandora Australia.
Adcock invested $600,000 into LawPath. “I look for businesses that are truly disruptive and have the potential to scale, not only in Australia but globally – LawPath is such a business,” Adcock said.
29 January 2015 - 5.8% Predicts Robert Walters
Increased hiring for legal professionals in 2015 is predicted according to the 2015 Global Salary Survey from specialist recruitment consultancy Robert Walters.
The survey covers a range of professions and is based on real placements made by Robert Walters consultants. It found growth in corporate transactions, demand for in-house counsel at the major banks due to regulatory reform, and the commencement of major construction projects will all lead to increased hiring in 2015.
Salary freezes were largely lifted in 2014. In 2015, permanent salaries are expected to grow year-on-year on average by 5.8%.
Robert Walters Legal Director, Andrew Hanson, said:
“Hiring managers are likely to struggle to secure lawyers within their budgeted salary bandings. After years of salary freezes, more associates are now driven by remuneration, and companies will need to make competitive offers if they want to secure top talent, possibly including sign-on and retention bonuses. Financial services, construction and corporate M&A associates will probably be the most difficult to source, while construction and corporate candidates, although not so scarce, may have already moved practice or been well compensated for staying.”
The Robert Walters Global Salary Survey is the most comprehensive of its kind and is based on the analysis of permanent, interim and contract placements covering all 24 countries in which Robert Walters operates. The sixteenth edition offers an overview of salaries and recruitment trends from 2014, as well as those expected in 2015.
Video commentary below discussing all professions
27 January 2015 - Does the ASX Kill Professional Services Firms?
21 January 2015 - Civic Legal Emerges from ILH Ashes
21 January 2015 - We Ask Lift Legal About the Law Firm that Increased File Openings by 61%
15 January 2015 - Demand for Employed Solicitors Rising From the Depths
The number of job vacancy advertisements for solicitors rose in 2014 from the depths of 2013. The increased demand for employed lawyers must be coming from smaller firms. At the end of last year The Australian published statistics showing that through calendar 2014 the number of non-partner fee earners in 39 large firms decreased by 4.9%. Growth in non-partner fee earner numbers occurred in only about 30% of those firms.
The graphs below show the number of internet job advertisements.
Above: Internet Job Vacancy Index. Star symbol tags November of each year
12 January 2015 - In-House Lawyering is Booming - Right?
5 January 2015 - Sold in Under 7 days: Law Central and Capricorn Partners
KordaMentha was appointed Administrator of ILH Group at 5.15pm on 17 December 2014. By the afternoon of 24 December 2014 the Administrator had a binding sale of shares in Law Central and Capricorn Investment Partners (Capricorn).
Left within the group is the law firm business, including Rockwell Olivier, for which the unpaid creditors will be holding out hope.
ILH bank debt - believed to be courtesy of St George Bank - was around $14 million as per ILH's 2014 financial year annual report. The amount owed to other creditors plus employee entitlements is likely to be around another few million dollars.
Capricorn is a financial planning business that found its way into ILH in September 2013. The owners of Capricorn received in the order of $4.5 million cash as well as now worthless ILH shares and promises of performance payments. The identity of the purchasers of Law Central and Capricorn have not been disclosed. The most likely scenario is that the previous owners of Capricorn gave back the cash they received and ran for the exit.
It is no surprise that Law Central sold so quickly. It is an internet-based legal documents business which had higher margins than the law firm business. The problem for the ILH creditors is that Law Central is a small business with an estimated turnover of $1m to $2m (a Legal Practice Intelligence guesstimate based on historical ASX disclosures).
It is hard to see how St George Bank and the other creditors will not be taking a substantial loss. They will no doubt be pondering the lessons learned of lending to a law firm that was a failure for investors from day one to the very end.
19 December 2014 - ILH Group Enters Voluntary Administration
Click image below to visit ILH Group website for more information
18 December 2014 - Indicators Pointing to a Busier 2015 for Family Lawyers
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15 December 2014 - AGS to consolidate within the Attorney-General’s Department
Statement by AGS CEO:
The Government has decided that AGS will be consolidated within the Attorney-General’s Department (AGD) and no longer operate as a government business enterprise. AGD and AGS are working closely with a view to the consolidation occurring on 1 July 2015.
This decision will not impact on the service AGS provides to its clients. AGS will continue to have its own independent functional identity within AGD. The expertise and experience of our lawyers will continue to be available to serve you with the professionalism you have come to expect.
We value your continued support in this interim period and will be continuing to operate without changes to our personnel or service delivery.
Ian Govey, Chief Executive Officer
15 December 2014 - ILH Shares in Voluntary Suspension During New Negotiations with Bank
ILH is the listed entity of law firm Rockwell Olivier
At the time of the trading halt on the ASX last week, ILH shares were at a historical low point of 1.9 cents per share. The original shares were issued in August 2007 at 50 cents per share.
During 2013 the company acquired a financial planning business, paying for it with a combination of ILH shares (9 cents per share) as well as $4.51 million in cash. During financial year 2014 the legal services business was the main contributor to a heavy financial loss for the year.
By 30 June 2014 ILH’s bank debt was up to $14.4 million. This amount represented roughly 50% of the 2013/14 annual revenue of the business.
A new financing / repayment arrangement with the bank was announced in September 2014. Now the company has obtained agreement by the bank to defer a $250K payment that was due in December. ILH expects to make a further announcement by the end of this week.
In the first week of December 2014 the long term managing director of ILH resigned and the company appointed a corporate advisory firm to assist with strategic planning.
14 December 2014 - Australian Government Solicitor to Close
The news was leaked over the weekend:
The Weekend Australian can reveal the 175 agencies to be cut include the Australian Government Solicitor as well as obscure committees such as a “governance board” on computer systems and a “partnership group” on student services. While the AGS had been seen as a potential asset sale, the government will instead close it down and transfer some of its staff to the Attorney-General’s Department in order to scale back overall spending.